Personal Finance 101 - How To Stop Spending All Your Money Growing Up Vs Adulting monochrome-photo-of-woman-wearing-eyeglasses

Personal Finance 101 - How To Stop Spending All Your Money

The first step towards optimizing your financial journey is learning how to stop spending all your money.

To do this, you need to be able to see and track your money, from the #200 in the pocket of the black jeans you wore last week to the #5000 you lent Abdul two weeks ago.

If you don’t already have a system for tracking and monitoring your spend, I will be teaching you how to build one today and sharing tips that will help you learn how to stop spending all your money.


Before we proceed, please note that this is for people who are actively interested in building wealth and meeting their financial goals. If you’re not going to take active steps towards growing your finances, this is not for you, but if you are ready to move from wishing for your finances to magically grow to actually making it happen, Welcome to GVA!


7 Easy Steps to Track and Control Your Spending

1. Download an expense tracker app.

It is not enough to know that you should track your expenses, you have to do it because that’s the only way to see what’s going on and know if you’re on track to meeting your financial goals.

Expense management apps are great because your phone is always at hand and you don’t have to do manual calculations or wait till you get home to jot your daily expenses down.

I use the Expense Manager app available on Google Playstore (even though updates have botched their design), and there are so many other options e.g. Money Manager and Monefy, so you can find one that works for you.

The expense manager app lets me:

  • Record and track all income and expenses under different categories
  • Upload pictures of receipts
  • Track multiple accounts (cash in Naira, bank accounts, investments and foreign currency left over from trips), all I have to do is add a new account.
  • Backup my data
  • See my entire net worth in my default currency on the summary page (the app automatically converts all foreign currency inputs to the default currency using current exchange rates)


Please note that expense tracking is not just “for people that have money”, it is for everyone.

If you do not know how much you have and how much you are spending, how do you know how much you need to meet your financial goals?

P.S. “Plenty Money” is not a valid answer.

P.P.S. You’d be surprised at how much money you go through in a month and how you’re spending it.


2. Separate your money.


You’re spending all your money because you have uncontrolled access to the money and no financial direction so your financial self-control is low.


To fix this, you need to split your money into these three categories:


  1. Cash: For day-to-day cash expenses, so you never get stranded. You should leave a little at home and some in your wallet. A useful rule of thumb is to never have too much at any point in time.
  2. The Spending Account: This is the bank account that you use for transfers, withdrawals, payments and purchases. This is the account with card, USSD and app access. You want to be able to get your money easily with no stress. Limit all your spending to this account.
  3. The Savings Account: This is the bank account where you house your savings AKA the money you don’t touch. This account doesn’t get a card or USSD access. If you really have problems with spending, delete the app. You want to make it as hard as possible to access the money but you still want to be able to see the numbers rise.

It’s like with the psychology of buying.

The probability of buying a drink impulsively at a store with open display freezers is higher than the probability of doing the same thing at a store with closed-display freezers.

This is because if there’s a glass door between you and the drink when you get the impulse, you are more likely to hesitate as a result of the extra effort required to open the door and that’s enough to get you to change your mind.

What we want is that moment of hesitation.


How To Stop Spending All Your Money Growing Up Vs Adulting Hesistation


Another thing the savings account does is motivate you.


When you can see the numbers rise, it encourages you to do better. Seeing an account balance of #1,000,000 is more motivational than seeing scattered amounts of #5000, #10000 and #200000 and having a vague idea how much you are worth.

When you hit your first hundred of thousands, you want to get to your next hundred, then a million and then two, and so on.


Because of the possibility of fraud, there is a security risk to housing all your money in one place but that’s why I like the idea of tracking your net worth with an app. As you diversify into investments (which you will), your summary page will show you how much you have in total, how much income you’ve received and how much you’ve spent.



3. Map out your monthly expenses.

Write down everything you spend money on and how much you spend on each line item monthly.

Next, group them into broad categories like food, savings and transportation.



4. Set a 6-month financial target.

Looking at your income and average monthly expense, how much can you save in a month and how much would you like to have saved in 6 months?

This goal has to be specific, achievable and time-bound e.g. By December 30, 20xx, I want to have saved a minimum of #500,000 from my monthly income.



5. Build your monthly budget.

Create realistic budgets for each of the categories identified in step 3 ☝️, starting with the non-negotiables e.g. Savings, transportation and utilities.

Here are some categories to guide you:

  • Savings
  • Transportation: For bus/car/train and other related transportation costs including things like car maintenance and driver’s salary.
  • Food: Grocery shopping and other related cooking costs
  • Family
  • Charity: Loans and gifts
  • Utilities: Cable/Netflix/Internet subscription, fuel, telephone/water/security/light bills etc.
  • Personal Expenses – Gym subscription, personal care products etc.
  • Entertainment – Eating out, hanging out etc. This is very important because life is for living.
  • Home Office/Business – If you run your own business, this is where business-related costs come in.
  • Miscellaneous – To cover any unforeseen expenses.
  • Monthly treat – This is your reward for good behaviour. If you succeed at sticking to your budget, it’s all yours to enjoy. If you don’t, it goes right into the Savings Account. Better luck next month. 🌚

Work on the budget split until you get to a place you are comfortable with (you can find ways to reduce your spend in some areas).


Please remember to set aside money for these three categories: Miscellaneous, entertainment and monthly treat.


Write the budget split down somewhere so that every month, you can make sure your spending account contains just the right amount you need to cover your monthly expenses and move everything else into your savings account.


If you receive any monetary gifts or get some extra income during the month, move that (or most of it) into the savings account too. Let that money grow. You weren’t expecting it anyway.


As we go on, we will learn how to make our savings work for us.


6. Put your expense tracker to use.

Empty your wallets and pockets and count all your cash and loose change then create an account on your app for cash and record how much you have in cash.

Create accounts on the app for all the places you have money chilling and put down how much you have in each place.


Move money out of your designated spending account to your savings account, leaving only the required amount for monthly expenses.

Do this immeditely, don’t put it off till next month or later or you’ll never get around to doing it.



7. Set up daily alarm notifications.

Set two daily alarms for Monday to Sunday to remind you to update your expense tracker. I would recommend setting them for midday and end of day.


You have to update your expenses every day or you’ll forget.


Download Habit Hub on Playstore. You can put down 5 habits you want to develop on the free version of the app. Make updating your expense manager one of them and set additional alarms.


Now that we have the basics sorted, let’s take a look at the rules.


How To Stop Spending All Your Money

a. Do not touch the money in your savings account.


b. Live within your means.

Learn to say “No”, “I don’t have money to spare” and “That’s beyond my budget for the month”.

Do not feel pressured to make bad money decisions. Your real friends would not want to put you in a place that would be bad for you financially.


c. Spend strategically. Always remember that if you exhaust your budget at the beginning of the month, you are going to have to wait until next month’s money comes in.


d.  Always leave just the amount you need for your monthly expenses in your spending account, everything else goes to the savings account.


e. Never borrow people money that you can’t forget.

You cannot count on being paid back (insist on it, but don’t count on it).

This is why I have loans slotted somewhere between charity and gifts so when you hit the limit, you know to stop.  At that point, you should probably be looking for monetary gifts of your own 😂.

If you’re still not convinced, you should read the replies and quoted replies to this tweet.


f. Keep all your receipts to help you track and record your expenses. Don’t forget to use exact figures.


g. If you manage to spend less than budgeted for the month, split what’s left into two. One half is used to boost your entertainment budget for next month and the other half goes into your savings account. Another reward for good behaviour.

However, if you are consistently spending less than budgeted for the month, you might want to review your budget and shift the goal post so you’re saving more.


h. Always keep your eye on your monthly expenses, if you’re going overboard somewhere, rein yourself in.


If you can’t trust yourself with money, how do you want to be trusted with wealth? 🌚


i. Make regular contributions to your savings. Always look for (legitimate) ways to make that money grow.


j. Join my personal finance/business support group on Telegram here and insert your details below to follow us on our journey to financial freedom as we share useful information and identify opportunities to grow and optimize our finances.



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If you enjoyed learning how to stop spending all your money, don’t forget to check out other articles like this on the site and follow me on Twitter (@chaotic_vixen).


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